Machinery / Industrial Parts & Tools

Mining, as one of the three main application fields of excavators, accounts for about 20% of the sales volume, and coal mining accounts for about 50% of the demand for large excavators.

In the first half of this year, the revenue and profits of China's mining industry grew at a high speed. At the same time, with the acceleration of decarbonization and energy transformation, the global demand for lithium, cobalt and other minerals grew significantly. Superimposing the global mining industry's expectations for new energy products, China's large excavator demand, especially the international trade market, brought new opportunities. With the advantages of price, business policy and supporting facilities, large domestic excavators are marching into the global market.

The domestic mining industry has a high profile and the profit has increased significantly

According to the statistics of the National Bureau of Statistics, in the first half of this year, the added value of industries above designated size increased by 3.4% year on year. Among them, the added value of the mining industry increased by 9.5% year on year. In terms of investment and profit, the investment in the mining industry in the first half of the year increased by 9.8%, realizing a total profit of 382.11 billion yuan, 1.33 times higher than the same period last year, maintaining a rapid growth.

Since the beginning of this year, with the steady progress of energy supply and price, the added value of the mining industry has increased. Among them, in the second quarter, the added value of the mining industry increased by 8.4% year on year, and the growth rate of the coal mining and washing industry exceeded double digits, both significantly faster than the growth of all industries above designated size. At the same time, the growth rate of raw coal production accelerated. In the first half of this year, 2.19 billion tons of raw coal was produced, an increase of 11.0% year on year. In June, 380 million tons of raw coal was produced, with a year-on-year growth of 15.3%, 5.0 percentage points faster than that in May.

The profits of the mining industry continued to grow at a high level, releasing a positive signal for mining machinery, including large excavators. However, contrary to the growth of investment in the mining industry, the sales of large domestic excavators continued to decline.

The sales of domestic large excavators continue to decline due to the downward cycle

According to the statistics of China Construction Machinery Industry Association, 10341 large excavators (≥ 28.5t) were sold in the domestic market from January to June 2022, a year-on-year decrease of 52.7%, accounting for about 11.35% of the total sales of domestic excavators.

In fact, the decline in sales of large excavators is mainly due to cyclical factors. The excessive stock leads to the demand release and can not get immediate feedback. On the whole, the sales decline of large excavators in the first half of 2022 has gradually narrowed since March, and is lower than the overall level of the industry. Among them, the sales volume in March decreased by 62.50% year on year, and that in June decreased by 31.70% year on year, significantly narrowing the decline. This also shows that the high landscape of the mining industry still has a significant role in boosting large excavators.

It is worth mentioning that the product performance and reliability of domestic brand mining machinery such as large excavators and super large excavators are growing rapidly. Moreover, depending on the price, maintenance guarantee, accessories supply and other advantages, users' satisfaction is constantly improved, and foreign brands quickly seize the market share of large and super large excavators. Among them, in 2020, the proportion of domestic large excavators has reached 57%, and the proportion of sales in 2021 and 2022 is expected to further increase.

At the same time, the international trade market and foreign large excavators are also facing more market opportunities.

New energy boosts the global mining industry, and the export of construction machinery is favorable

According to the Report on Development Trend Analysis and Investment Prospect Forecast of China's Mining Engineering Construction Industry (2022-2029) released by Guanyan Report Network, the demand for non-ferrous metals represented by copper has been increasing in recent years, supported by the popularization of new energy vehicles and the promotion of the carbon neutral roadmap.

According to the Global Mining Outlook 2022 released by KPMG, more than 300 industry executives from 23 major markets were surveyed, and 62% of respondents were confident in the growth prospects of their enterprises in the next 24 months. Although this figure is slightly lower than last year's survey (66%), it reiterates that the volatility of commodity prices, coupled with broader geopolitical and COVID-19 uncertainty, has not weakened the optimism of the market. Despite great fluctuations, the demand for minerals including lithium, cobalt and graphite has increased dramatically. These are important parts of the global decarbonization journey

It is predicted that with the acceleration of decarburization and energy transformation, the global demand for lithium, cobalt, graphite and other minerals is expected to grow dramatically.

In response to the growing demand in the international trade market, domestic excavator brands have already vigorously promoted the development of the international trade market, and overseas sales are continuing to rise. Among them, Indonesia is the largest nickel producer in the world. The growing demand for nickel from pure electric vehicle (EV) batteries has also increased the demand for construction machinery developed in Indonesia's nickel mines. At present, domestic brands represented by Sany are competing with foreign brands in the Indonesian market, and have strong competitiveness. Among them, the market share of Sany excavator in Indonesia has reached about 21%.

In the first half of this year, Liugong also overcame the epidemic situation and the difficulties of overseas logistics, and made remarkable achievements in its continuous efforts to dig and dig. Since the beginning of the year, the news of batch delivery has been heard all the time. On April 26, ten batches of nearly 300 excavators were delivered to construction sites around the world in the presence of all guests.

It can be seen that the global market's demand for large excavators in China is rising.

The technical innovation of mining will release the demand for electrified products

At the same time, KPMG's Global Mining Outlook 2022 mentioned that nearly half of mining executives (46%) believe that technological innovation will be the source of major disruption in the industry in the next three years, and almost everyone is determined to seize this opportunity. The adoption of new energy technologies can help mining companies reduce carbon emissions in their operations.

As the country that first laid out and vigorously promoted new energy engineering machinery, China's new energy, especially electric engineering machinery, has taken the first mover advantage in the world. The global mining industry's optimism about new energy engineering machinery is bound to drive domestic electric engineering machinery to go abroad and compete on a larger stage.

To sum up, the global mining industry is ushering in more new changes and opportunities, and the domestic mining industry is also ushering in a new demand growth period in the international trade market. We also need to look at competition and development with a new mindset. We hope that domestic and super large companies can achieve more breakthroughs in technology and witness the birth of more miracles while increasing sales.